Rolex has basically not changed its product development and marketing strategy since the 1960s. Its successful business model has been maintained intact over the decades, and the lack of change gives Rolex strong legitimacy. However, as this chapter shows, the organization of the firm was deeply transformed after 1990 to control production and strengthen competitiveness against the emergence of many new competitors onto the segment of luxury watches (Cartier, LVMH, Omega, etc.). First, Montres Rolex SA, in Geneva (formerly named Aegler), took over the manufacture of movements and numerous suppliers to exert control over production. Second, it relaunched its sub-brand Tudor and focused on a lower segment (premium watches) in order to prevent competitors from this segment from becoming too strong.
Finally, this chapter discusses the sharp increase in prices of Rolex over the last three decades. It shows not only that the iconic models of this brand became more and more expensive but also more exclusive, in the context of growing income inequality. The comparison of this price with the number of working days needed, on average, by an American worker to purchase a Rolex demonstrates an increasing social distance. Related to this change, the importance of auctions and of the second-hand market in increasing Rolex’s exclusivity is explored in detail.
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